The problem is that stocks' dividend yields now stand below 2 percent, compared to 4.5 percent in the 1920s, Arends says.

Meanwhile, real economic growth is running only at about 2 percent. The entrance of new companies into the market costs you 1 percent. That leaves you with a real return of about 3 percent, far below the historical average of 7 percent, Arends notes.

The S&P 500 ended at 1,988.40 Friday, close to Thursday's record of 1,994.76.

Some market participants warn that bulls may be overreacting to stocks' recent gains considering the thin trading conditions of late August.

"We're seeing a few people jump into the market because things look 'A' ok right now," Jeff Duncan, president of Duncan Financial Management,tells Reuters. "But it's a slow period . . . before Labor Day, so it isn't taking much to move the market up."

Elsewhere, individual investors apparently aren't worried that stocks continue to hit record highs, even though the S&P 500 index hasn't experienced a 10 percent correction since October 2011.